Sky-High Prices Mute CA’s Economic Recovery

By Emily Hoeven | CalMatters

Starting today, face masks are once again required for students and staff at Berkeley Unified School District. Los Angeles County on Friday extended its mask mandate for public transit and transportation hubs. State health officials are urging eligible 5- to 11-year-olds to get their COVID-19 booster shot.

The trio of actions comes amid a steady uptick in California’s COVID test positivity rate — which breached 6% on Thursday, just a few days after hitting 5% for the first time since February — and signals further uncertainty for an economy already buffeted by troubling financial winds, including skyrocketing inflation rates.

• Berkeley Unified Superintendent Brent Stephens: “We are experiencing an increase in educator absences at this time. Most recently, we have only been able to fill about 50% of our teacher absences with substitute teachers.”
• Andrew Shore, owner of Sea Pointe Design + Remodel, an Irvine-based residential remodeling firm, told the Wall Street Journal: “We have had a number of (projects) who have been in the pipeline for months and are balking. … I really want to see how the next three or four months go before we hire anyone else and be overstaffed rather than understaffed.”

Against this muddled backdrop, California’s unemployment department on Friday released a report showing the state’s jobless rate fell to 4.6% in April, its lowest during the pandemic and a slight drop from March’s revised rate of 4.8%.

• Gov. Gavin Newsom: “California continues to lead the nation’s economic recovery, getting more people back to work and off the unemployment rolls than the rest of the country. But we know more work is needed to bolster the economy and help offset higher costs that families are dealing with right now.”
• Still, California’s job gains are slowing relative to other states: The Golden State added 41,400 nonfarm jobs in April, behind Florida’s 58,600 and Texas’ 62,800, according to the California Center for Jobs and the Economy.
• And new federal data shows that California accounts for more than 25% of the nation’s ongoing unemployment claims — even though it had nearly 1.28 million unfilled job openings as of March 31, said Michael Bernick, an attorney at Duane Morris and former director of the state Employment Development Department.
• Bernick: “The picture that emerges … is of a state economy that is continuing to recover, but in danger of stalling or going backward in light of the latest news on inflation and interest rate hikes.”

Case in point: California gas prices hit a new record per-gallon high of $6.61 on Sunday, just a few days after passing $6 for the first time in history.

And the median price of a single-family home reached a record $884,890 in April, according to the California Association of Realtors — even as sales dropped 8.5% on an annualized basis.

• Jordan Levine, vice president and chief economist for the Realtors: “With April pending home sales recording the worst drop in two years, the affordability challenges that buyers have been encountering are materializing in recent sales trends, and further declines in housing demand could continue in the second half of the year.”

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